PH lowers sugar allocation for US

Manila has lowered its sugar allocation to Washington for the current crop year because of unpredictability of the United States (US) market, the Sugar Regulatory Administration (SRA) said on Friday.

“We have decided to lower our allocation because of the volatility in the US market,” SRA Administrator Ma. Regina Bautista-Martin said in a telephone interview.

The Philippines has a regular US sugar quota of 138,827 metric tons (MT) this year.However, due to oversupply of the sweetener, unlimited access of Mexico to the US sugar market and the decline in the price, only 53,690MT were shipped to the United States.

At the end of crop year 2012-2013, the Philippines still has a carry over of volume about 80,000MT of sugar allocated to the US market. Of the said volume, about 57,000MT were readily available for early shipment.

“We lowered our allocation for US market this year because we just want to maintain our regular US quota, which is about 138,000 MT,” Martin said.

Based on its Sugar Order 1, the SRA said that it expects sugar production for crop year 2013 to 2014 to reach 2.45 million MT, roughly the same level as the actual production of 2.45 million MT in the pervious crop year.

Of the total projected volume, Martin said that the agency has allocated 2 percent for A sugar or US sugar quota, 12 percent for D sugar or world market sugar, and 86 percent to B sugar or domestic market.

“Based on our estimates, there’s no major addition to areas planted to sugarcane and the weather remained unpredictable so we are just keeping our targets close to that of last year,” she said.

Martin also said that demand for sugar in the domestic market remained strong at 2.1 million MT as prices remained stable.

In support of the diversification efforts of the Philippine sugarcane industry and in order to expand the market of sugar, Martin also reiterated the use of D sugar for the production of bioethanol pursuant to Sugar Order 5, series of 2008-2009, is encouraged.

“Price situation in the world market remains volatile and the bioethanol mandate could very well absorb the surplus sugar at viable price levels,” she said.

As of August 2, actual shipment to the world market is around 140,000MT.